Powders of YSZ and NiO were prepared by precipitation of hydroxides, calcination and wet grinding. The dispersion conditions were optimized from zeta-potential and viscosity studies. Aqueous suspensions of both the powders exhibited maximum zeta-potential values in two ranges of pH, 3 to 4 ( positive) and 9 to 11 ( negative), establishing the feasibility of a dispersion of both oxides together. Viscosity measurements indicated presence of effective dispersion of a 1: 1.5 mixture of YSZ: NiO below a solid concentration of 25 volume percent. Aqueous tape cast slurries were formulated using PVA solution as binder and glycerol as plasticizer. The rheological behavior of these slurries ( viscosity and visco-elastic parameters) was strongly influenced by slight variation in the solid content. Visco-elastic measurements revealed all the slurries to be predominantly viscous and become more elastic with increasing solid content. Defect free flat tapes could be obtained by casting the slurry with optimum flow characteristics ( i.e., pseudoplastic but non-thixotropic) that could be sintered to flat sheets with 80% T. D. ( theoretical density) and 20% O.P. ( open porosity) at 1450degreesC. Upon reduction in hydrogen at 1000degreesC, it formed in to YSZ-Ni composite that retained the same micro structural features of YSZ-NiO. (C) 2004 Kluwer Academic Publishers.